Housing Provides Economic
Opportunities for Rural Areas

By Zanetta Doyle, Digest Editor

Many individuals dream of owning their own home, but today’s economic climate makes it more challenging for that dream to become a reality, particularly for rural residents. Realizing the economic impact that affordable and quality housing can have on rural communities, various programs have been created through the federal government as well as regional development organizations that promote and encourage homeownership in rural areas. “We’ve found that housing is a social and economic issue.” said Paul Rechlin, Executive Director of the Lewis and Clark Regional Development Council (RDC), in Bismarck, North Dakota. “Providing affordable housing opens up opportunities to sustain communities by retaining people in the community and creating new jobs.”

Recognizing the need for more affordable, quality housing in their area, the Lewis and Clark RDC board established CommunityWorks, a separate 501(c)(3) corporation to deal solely with housing issues.

According to Rechlin, who is Executive Director of both the RDC and CommunityWorks, “The creation of CommunityWorks has allowed us to have a significant economic impact on the counties we serve and other counties outside the regional council’s 10-county jurisdiction.” Through its various programs, CommunityWorks has provided assistance to help families and individuals purchase and construct their own homes or for the rehabilitation of their existing home through the DREAM Fund program (Downpayment and closing cost, Rehabilitation, Emergency repairs, And construction and construction bridge loan, Mortgage assistance). To date, more than 45 families have received loans totaling over $750,000 through this fund. Although the DREAM Fund is not yet statewide, 15 counties currently have unrestricted access to the program, with another nine counties having limited access. Rechlin stated that before a county has full access, CommunityWorks must receive support from local lending institutions, utility companies and counties. CommunityWorks hopes to expand by five to six counties each year until the DREAM Fund is statewide.

In 2000, CommunityWorks received a statewide charter from Neighborhood Reinvestment Corporation, which provides additional funding, technical assistance, training and access for lenders to additional secondary markets.

CommunityWorks also works on multi-family development projects. They partnered with a developer to convert an abandoned middle school in Beulah, North Dakota into a 28 unit low-income housing complex. The same developers are partnering with them to construct a $5 million 46-unit project that will provide housing to low-income seniors.

CommunityWorks has also been authorized by USDA Rural Development to administer the Rural Home Loan Partnership program. Through this program families are able to leverage their first mortgage through lenders using various home loan products and Rural Development Direct Loan funds.

The USDA Mutual Self-Help program through USDA Rural Development gives low-income families a chance to build their own home. The families work in groups and provide 65 percent of the construction labor. To date, 10 homes have been completed or near completion with over $800,000 in financing being provided through various programs. CommunityWorks will be constructing 22 more homes over the next three years through the Self-Help program.

Fannie Mae has designated CommunityWorks as the lead agency for the North Dakota HomeChoice Coalition. Comprised of housing agencies, lenders and agencies who deal with persons with disabilities, the coalition helps families and individuals find viable options for the purchase of homes or the rehabilitation of homes to make them handicapped accessible. The funding sources includes loans through lenders and the DREAM Fund as well as grant dollars.

CommunityWorks has partnered with the Spirit Lake and Standing Rock Tribes to coordinate reservation mortgages. This program assists families living on the reservation to become mortgage ready and helps them through the home buying and financing process. CommunityWorks is working with the tribes’ housing authorities to provide financial literacy and homebuyer education.

CommunityWorks also provides technical assistance to lenders by assisting them with the processing and origination of first mortgage loans through various programs and is an approved lender with North Dakota Housing Finance Agency, Bank of North Dakota and First Mortgage.

Economic and Social Impact

These programs are constantly expanding and the economic impact has been substantial. According to Rechlin, CommunityWorks has helped leverage more than $3 million in lending. The staff has witnessed the positive attitudes of those who are assisted in obtaining affordable housing they once thought impossible.

For more information contact:

Lewis and Clark CommunityWorks at 701/255-4591 or email lccw@gcentral.com

Finding Quality Housing in Rural Communities a Challenge

The 2001 US Census Bureau American Housing Survey (AHS) reported that 6.9 percent of nonmetropolitan units are either moderately or severely substandard. Minorities in rural areas are among the poorest and worst housed groups in the entire nation, with disproportionately high levels of inadequate housing. Non-white and Hispanic rural households are three times more likely to live in substandard housing than white rural households. Minorities are also more likely to live in inadequate housing in nonmetropolitan areas than in metropolitan areas. Rural African Americans have particularly high substandard housing rates, as nearly one in five nonmetro African-American households live in substandard housing. In addition, the report revealed that 189 of the nations 200 poorest counties are rural.

According to the National American Indian Housing Council, among low-income American Indian homes in tribal areas, more than 30 percent are overcrowded or have facility deficiencies. That statistic is 19 percent in other rural counties and 13 percent in metropolitan areas.

In their research, the Housing Assistance Council (HAC) made a connection between consistently poor economic conditions, and the inability to afford or find quality housing in rural areas. “Housing costs are a problem everywhere in the country,” said Moises Loza, HAC’s Executive Director. “Rent and house prices in rural America are generally lower than in metropolitan areas, but incomes are also lower. The federal government standard says people shouldn’t have to pay more than 30 percent of their income for their housing. But HAC found 5.5 million rural households are paying more than that.”

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